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Thursday, 30 December 2010

Dubai shares advanced for a second day as Nakheel PJSC, the developer of palm-shaped islands off the city’s coast, said it received funds from the Dubai government to repay Islamic bonds maturing in January.

Emaar Properties PJSC, the United Arab Emirates biggest property developer, rose to the highest in more than a week. Drake & Scull International, the Dubai-based engineering contractor for the real-estate industry, gained for a fourth day. The DFM General Index advanced 0.5 percent to 1,630.53 at 12:41 p.m. in the emirate. The measure retreated 9.7 percent this year and is headed for its worst annual performance since 2008.

“We are seeing support from the government side, and that gives confidence to investors,” said Abdel-Rahman Kharma, senior equity trader at Naeem Brokerage in Dubai. “That added to the positive sentiment towards the Nakheel situation.”

Dubai's ambition to become an international equity hub may have been put on ice by its need to repay debts, but the Gulf Arab state could still become a magnet for global equity funds if the UAE consolidates its bourses and earns MSCI emerging market status.

In 2007, Dubai agreed to pay $4 billion for stakes in Nasdaq OMX and the London Stock Exchange, saying the buys would help the emirate draw in international liquidity and become the bridge between markets in the United States, Europe and Asia.

But, mired in debt and faced with looming repayment deadlines, Dubai has been forced to scale back those plans.

Port operator DP World's DPW.DI contract to manage the Mina Zayed port for Abu Dhabi Terminals (ADT) will not be renewed after it expires on Dec. 31, the two companies said in a statement on Thursday.

Following the expiry of the five-year management contract, ADT will resume management of the terminal. DP World said the earnings before interest, tax, dividend and amortisation (EBITDA) contribution from the agreement was 'not material' to the company.

ADT, which is a subsidiary of Abu Dhabi Port Company (ADPC), added that discussions surrounding operations for the new Khalifa Port in Abu Dhabi have not resulted in any binding agreement.

German builder Hochtief was preparing to lose its fight for independence from Spanish predator ACS yesterday, revealing a deal with its creditors to allow for the change of control.

Hochtief's lenders have waived their right to cancel credit lines should any shareholder hold more than 30 per cent, Hochtief's chief financial officer said in a newspaper interview, smoothing the way for the much more heavily indebted ACS to build a controlling stake.

He said lenders were happy that the company was well capitalised enough, thanks in part to its sale of a 9.1 per cent stake to the government of Qatar in December.